‘Price war has already started for SUVs’

L to R: Mr. Tae-Jin Park, Managing Director and CEO, Kia India, Mr. Myung-Sik Sohn, Chief Sales & Business Officer, Kia India,  Mr. Hardeep Singh Brar – National Head, Sales & Marketing, Kia India
L to R: Mr. Tae-Jin Park, Managing Director and CEO, Kia India, Mr. Myung-Sik Sohn, Chief Sales & Business Officer, Kia India, Mr. Hardeep Singh Brar – National Head, Sales & Marketing, Kia India

Summary

  • Kia is betting on doubling its market share from 5% to 10% within five years, and launch hybrid products in the next two years. It plans at least two IC-engine and 2 EV model launches in five years, Kia India chief executive and managing director Tae Jin Park said

NEW DELHI : The SUV market in India, particularly in the popular mid-SUV category, is experiencing a surge in competitive intensity, triggering a price war, Kia India chief executive and managing director Tae Jin Park said on the sidelines of the launch of the new, mid-life facelift of its best-selling SUV Seltos. Kia is investing heavily to expand its capacity, sales network, as well as product development, in India, and is ready to take a hit on profitability to grow its market share to counter a series of launches of aggressively-priced vehicles by Japanese and Indian automakers. Kia is betting on doubling its market share from 5% to 10% within five years, and launch hybrid products in the next two years. It plans at least two IC-engine and 2 EV model launches in five years, he said. Edited excerpts:

What is your strategy for the Kia 2.0 growth plan?

To reach our target market share of 10% of the passenger vehicle market in India, we are investing to develop new models specifically for the Indian market, like the RV slated for a 2025 launch, both EV and IC- engine variants. We will also invest to expand production capacity and dealership network to increase sales reach.

What are your production ramp-up plans?

We produce 350,000 units a year today. We will reach 435,000 units capacity by 2025. We are only focusing on the SUV segment in India. Our target is to reach 10% market share of the total passenger vehicle market and over 25% in RVs (recreational vehicles) or SUVs. Based on estimates, by 2030 the Indian passenger vehicle market will be 5 million, out of which 20% or 1 million will be EVs. We want 10% market share in each segment —ICE and EV by 2030.

The mid-SUV market has grown to be highly competitive. As rival OEMs move to offer feature-rich products like the Seltos how will you protect your market share and grow?

The trend in India, even during covid period was that domestic manufacturers as well as Japanese manufacturers were very aggressively launching new models, also copying our features and technologies. It is very difficult for us, that is why we are looking at our target somewhat conservatively. All the segments we are operating in here are very competitive now. Price wars have started. Even though we are investing very aggressively in this market, it is not an easy target. We don’t want to compete on price with local manufacturers because Kia has had a bad experience with that approach in China. We will offer superior product experience to customers and anticipate their needs. That is our competitive strength.

How are you balancing market share and profit?

Managements think more market share leads to higher profits. Our top management thinks if Indian market has high potential we should invest. Even if we sacrifice our profit, we should maintain our market share. t is due to our management’s assurance that we will come up with market-friendly pricing. They have even agreed to sacrificing exports and focusing on domestic supply. This will continue for a few years. We have a very competitive product and pricing with the Seltos facelift. The customer-centric approach and customization to Indian customer’s needs is the reason of our success in the Indian market. We must maintain those standards.

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